Commentary

Next Generation Word-Of-Mouth Measurement Metric?

According to a new study and development by ForSee, for the past decade, Net Promoter Score (NPS) has served as a leading metric used by businesses to measure customer recommendations and loyalty. After its introduction in 2003, NPS quickly became the most popular and widely adopted customer experience metric for U.S. businesses.

Research from the Temkin Group in 2012 supported the popularity, says the report, showing that 83% of companies asked their customers the Net Promoter question: “How likely is it that you would recommend (this product/service/brand) to a friend or colleague?” From 2011 to 2012, NPS was the fastest growing customer experience metric.

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But business leaders incorporating NPS into their executive dashboard are constantly striving to innovate their analytics and not rely on status quo, says the report. According to ForeSee analysis and research, a more equitable method of deleting “detractors” from the measurement equation provides, as their analysts propose, a more accurate understanding of the word of mouth recommendation quotient.

The report says that ForeSee has collected more than 2 million survey responses over the last two years to research and develop a more accurate and precise way to measure both word-of-mouth promoters and detractors.

As a result, ForeSee conceived the Word of Mouth Index for the next generation. WoMI measures both likelihood to recommend and likelihood to detract from a specific brand by adding a second question: “How likely are you to discourage others from doing business with this company?” By measuring both positive and negative word of mouth, business leaders gain a next-generation metric that, when viewed within the context of the customer experience ecosystem of metrics, provides actionable insights that can help leaders improve key business outcomes, including word of mouth, says the report.

That having been said, there follows several top brand categories comparing the WoMi index to the current NPS index as of the third quarter of 2013.

Top B2B Brand Indices (Q3, 2013)

Brand

WoMi

NPS

3M

55

46

Cisco

46

34

GE

44

28

John Deere

59

47

Nokia

39

21

Oracle

39

21

Siemens

39

25

Xerox

39

20

Source: Forsee. October 2013

 

Top Computer and Electronics Manufacturers Brand (Q3, 2013)

Brand

WoMi

NPS

Adobe

45

31

Apple

65

54

Blackberry (RIM)

39

19

Canon

52

37

Dell

43

18

HP

57

42

IBM

41

30

Intel

44

38

Microsoft

40

25

Nintendo

52

40

Panasonic

51

39

Philips

43

28

Samsung

48

37

Sony

52

41

Source: Forsee. October 2013

 

Top Consumer Packaged Goods (CPG) Brands (Q3, 2013)

Brand

WoMi

NPS

Avon

61

52

Budweiser

44

25

Colgate

41

18

Corona

43

21

Danone

35

21

Gillette

42

24

Heinz

47

32

Johnson & Johnson

54

41

Kellogg

48

29

Kleenex

45

24

Nescafe

44

27

Nestle

44

28

Pepsi

40

17

Sprite

39

12

Source: Forsee. October 2013

The full report continues with Financial Services Brands, Retail Brands and Other Brands to not only provide comparative data with which to develop marketing strategy, but to review and consider improvement to the metrics of the proposed measurement methods.

ForeSee concludes that some organizations will continue to use word-of-mouth measurement as a satisfaction metric because of its ease of implementation, sharing, and understanding. Given this reality, organizations need to adopt measurement methodologies that provide more accurate pictures of the business world.

The report suggests that a system that significantly advances the measurement of the customer’s experience with primary benefits for businesses operating in today’s high-speed, word-of-mouth-driven culture would include:

  • Any measurement with one simple value that can be used to rally stakeholders (executives, employees, Wall Street, board members, etc.) around their customers’ experience and across an organization
  • An understanding of the difference between True Detractors and True Promoters to eliminate the risk of alienating customers who aren’t legitimate detractors
  • Adding a second question to understand what drives negative word of mouth as well as positive word of mouth to allow companies to take proactive measures to fix issues

To review the complete report in PDF format, please visit ForeSee here.

 

 

 

1 comment about "Next Generation Word-Of-Mouth Measurement Metric?".
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  1. Scott Martino from Audi of America, October 30, 2013 at 12:28 p.m.

    The issue I have with this is if a 1-6 NPS rating is enough to make the case that a person is truly a detractor or if they simply will not recommend.

    While there are products that I have an affinity for it doesnt mean that I would place my name behind them. In which case i would rate my level of recommendation lower than a top two box.

    Before I consider adding another question it would be worth asking if instead of a 1-6 rating is the proper scale for "detractors" maybe its a smaller scale of 1-3? The % of detractors would probably line up more closely within these two solutions.

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